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Comment

18.12.18

Ten lessons from Brexit

Source: PSE Dec/Jan 2019

Chris Painter, professor emeritus at Birmingham City University, examines the many lessons flowing from the June 2016 EU Referendum.

The consequences flowing from the June 2016 referendum decision to discontinue the UK’s membership of the European Union are manifold. Constitutional, political, economic, public funding, and global lessons all warrant attention as the clock ticks towards a March 2019 departure deadline.

Constitutional lessons

1) In the UK, nationwide referenda have been sparingly used because of the dilemmas plebiscitary democracy pose for deliberative parliamentary democracy. There is the legitimate question of whether political system reforms involving more direct say for voters will re-engage with an increasingly distrustful citizenry – an issue considered by Seyd, Curtice and Rose in the May 2018 edition of British Journal of Politics and International Relations.

But for something so momentous to the future of the country, and common in other jurisdictions, rules surrounding such a referendum should have stipulated more than a simple majority. Options included requiring a minimum proportion of the electorate to vote for change, or endorsement from each constituent part of the UK (Scotland and Northern Ireland voted to remain.)

2) Electoral reform has traditionally meant the voting system. The EU Referendum highlighted rules relating to the conduct of elections themselves, notably as applied to digital campaigning where there is much lighter regulation. The Electoral Commission, Information Commissioner’s Office, and High Court have all been obliged to investigate abuses. Ostensibly independent referendum campaign organisations were closely collaborating, breaching spending limits.

Similarly disturbing were infringements of data protection law, Facebook particularly – but by no means uniquely – caught in the eye of the storm. There are unanswered questions about some campaign funding sources, drawing in the National Crime Agency, as well as circumstantial evidence of alt-right influencing networks either side of the Atlantic traceable back to Moscow.

Political lessons

3) As Tim Bale, of Queen Mary University of London, points out in the August 2018 edition of the Politics journal, the Euro-sceptic wing of the Conservative Party and UKIP have fed off one another. This induced David Cameron as prime minister in 2013 to fatefully commit to the EU Referendum, lancing a boil causing mounting internal division within the Conservative Party and working to the political advantage of UKIP.

In fact, the polarising effect of the narrow referendum result continued to divide opinion in the country, with the internal war within his own party more fractious than ever.

4) Since the referendum, much store has been set by the ‘will of the people,’ a rhetorical device for stifling dissent. In a plural society, no such fixed entity exists. Instead, there is a shifting aggregate of differently nuanced views. When Theresa May sought to validate her ‘red line’ Brexit take on the 2016 referendum result, calling the ‘snap’ 2017 general election, she lost her parliamentary majority altogether; hence the muddle that can occur from mixing plebiscitary and representative democratic forms.

Economic lessons

5) Despite continuing claims of a ‘Brexit dividend,’ a majority of forecasts predict a negative relative impact on economic growth, the extent of which is contingent on the kind of deal reached. Of course, mainstream forecasters can always be confounded by events, characterised by the Leave camp as ‘project fear.’

But the alternative is relying on acts of faith (or hunch) rather than rigorous modelling. Policy outcomes matter, not just the processes through which decisions are taken. Yet, we had the perverse logic that avoiding worst-case scenarios offers the prospect of a ‘Brexit bounce!’

6) What lies behind pessimistic forecasts is disruption to supply chains from exiting the EU customs union and single market, hence the search for a degree of regulatory alignment to mitigate the worst effects on trade flows and business costs. This began in earnest with May’s July 2018 Chequers plan, with a backstop customs arrangement to solve the Irish border conundrum following transition looming over everything.

It fell foul of the ‘take back control’ mantra of Leave campaigners, who favoured a much a looser free trade agreement. With Brussels also determined to hold the line over the integrity of its single market and maintenance of a competitive level-playing field, subsequent negotiations led to the November 2018 legally-binding withdrawal agreement.

Alongside the general political declaration on a long-term relationship, in which May’s goal of ‘frictionless’ trade appeared elusive, it was formally endorsed at a specially convened EU summit. But neither side of the domestic Brexit divide displayed much enthusiasm for the deal.

Public funding lessons

7) After a near decade-long squeeze on public service and welfare funding leading up to the 2018 Autumn Budget, the prime minister committed to hiking NHS spending and lifting the local authority borrowing cap to revive council housebuilding. Pressure to properly resource the changeover to Universal Credit had also become irresistible.

At the Conservative Party Conference, May thus floated the tantalising prospect of an ‘end to austerity.’ An ill-defined pledge, it carried some credence with the fall in overall public spending coming to an end. It meant, however, likely sacrificing the fiscal balance that has been an article of faith for Conservative chancellors since 2010.

Projected average real-terms increases in departmental budgets in the next spending planning period from 2020-21 will still fall below an underwhelming forecast of 1.5% economic growth over the same period. Importantly, even these expectations depended on the Brexit outcome.

8) Then there are the threats to programmes directly financed through the EU budget, notably the European Structural and Investment Funds, in particular the Regional Development and Social Funds, respectively promoting social and economic cohesion and employment.

Devolved administrations of the UK, and local authorities located in areas where GDP per person is below the EU average, have been especial beneficiaries. The 2017 Conservative election manifesto committed to a substitute UK Shared Prosperity Fund but, despite promised match-funding, details awaited further consultation. The Brexit dividend fallacy, moreover, continues to be the spectre at the feast.

Global lessons

9) The American politician, Dean Acheson, famously opined in 1962 that ‘Great Britain has lost an empire and has not yet found a role.’ It did thereafter assume the mantle of intermediary between the USA and EU. Brexit obviously makes that role redundant. Far from resurrecting ‘global Britain,’ there are already accounts of how the UK’s influence on the world stage is diminishing by detaching itself from membership of the international organisation right on its doorstep.

10) Hard Brexiteers contend that the UK could manage a clean break from the EU by falling back on World Trade Organization terms. But an international rules-based system is being undermined not just from the usual quarters, but also by the Trump presidency, seemingly intent on reducing the international community to a Hobbesian state of nature. He has unilaterally reneged on multilateral agreements, using trade wars as an instrument of his ‘America First’ political platform. The UK therefore risks becoming more susceptible to a volatile international environment.

There are indeed many lessons for deep reflection, especially in the aftermath of the December parliamentary showdown on May’s Brexit deal and the uncharted waters that may well lead us to.

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